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This new analysis, under the Technology Innovation Needs Assessments (TINAs), delves into heat, bioenergy, electricity networks and storage (EN&S), hydrogen for transport, marine energy, offshore wind, nuclear fission, and Carbon Capture and Storage (CCS). It examines the commercial potential and key economic benefits of these technologies to the UK, alongside the key hurdles which need to be overcome and how investment can best be channelled to ensure they reach their full potential.

The work has been undertaken by the Low Carbon Innovation Coordination Group (LCICG), which is made up of a range of different bodies including the Department of Energy and Climate Change (DECC), the Department for Business, Innovation and Skills (BIS), the Carbon Trust, the Energy Technologies Institute (ETI), the Technology Strategy Board (TSB), the Scottish Government, Scottish Enterprise, the Engineering and Physical Sciences Research Council (EPSRC), and other organisations with significant low carbon innovation interests.

The TINA analytical framework was developed and implemented by the Carbon Trust with contributions from all core LCICG members as well as input from numerous other expert individuals and organisations.

Key findings of the Technology Innovation Needs Assessments (TINAs)

Heat:

Space and water heating (excluding industrial process heat) account for about a quarter of UK energy consumption today, with demand of approximately 550-600 TWh per year. This TINA focuses on heat pumps, heat networks and heat storage as three key heat technologies that could play a key role in meeting UK and global heat demand in an emissions constrained future. Analysis suggests that these technologies could deliver anywhere from one-third to almost the entire UK heat demand by 2050. We estimate potential 2050 deployments levels of 70-240GW (100-340TWh) for heat pumps, 10-95GW (20-200TWh) for heat networks, and 6-190GW for heat storage.

Innovation in these heat technologies could reduce UK energy system costs by £14-66 billion to 2050, with heat storage also offering additional value by enabling other system adjustments. Innovation can also help create a UK industry with the potential to add £2-12 billion to UK GDP to 2050. Significant private sector investment in innovation, catalysed by public sector support where there are market failures, can deliver the bulk of these benefits with strong value for money.

Bioenergy:

Bioenergy could provide upwards of a tenth of UK total primary energy supply by 2050 and can be supplied as heat, power, liquid transport fuel and biomethane. Achieving optimal deployment, sustainably and at lowest cost, will require significant innovation on advanced conversion technologies and their feedstocks.

Innovation in bioenergy has the potential to reduce UK energy system costs by £42bn (£6-101bn) by 2050. International business development is calculated to provide further economic value to the UK of £19 (6-33) bn. Significant market barriers are identified which could restrict the UK from realising these domestic savings and international markets.

Highest priority is identified for woody/grassy crops with higher yields on marginal land, advanced biofuels demonstration, proof of integrated gasification systems at scale, and high efficiency biopower systems that are robust to a variety of feedstocks and ready for CCS.

Carbon Capture and Storage (CCS):

CCS for the power sector has tremendous potential to help the UK and the world effectively meet GHG and energy security targets. Innovation across the CCS technology chain could reduce UK energy system costs by £10 to 45 billion* to 2050, and innovation to ensure the security of long-run CO2 storage remains particularly critical to CCS viability. Innovation can also help create a UK industry with the potential to contribute further economic value of £3 to 16 billion* to 2050. Significant private sector investment in innovation, catalysed by public sector support where there are market failures, can deliver the bulk of these benefits with strong value for money.

Electricity networks and storage (EN&S):

Advanced EN&S technologies have the potential to address new stresses that are likely to be placed on the electricity system, and to do so more cost-effectively than would be possible through traditional methods of grid reinforcement and fossil-fuel-powered system balancing capacity. EN&S technologies could play an important role in the future energy system, supporting the uptake of renewable electricity generation, renewable heat, electric vehicles (EVs), and other low carbon technologies. Innovation in EN&S technologies could save the UK £4 to £19 billion* to 2050 and could help create UK-based business opportunities that could contribute an estimated £6 to £34 billion* to GDP to 2050.

Innovation across the technology chain, from hydrogen production to fuel cell electric vehicles, could reduce the cost of delivering these benefits by up to £80bn from 2020 to 2050. Investment could also create UK industries with the potential to contribute economic value of up to £26bn to 2050 via global sales of products and services, with a further economic benefit of up to £23bn to 2050 via producing transport fuel in the UK from UK primary energy sources.

However, these technologies face some difficult challenges, in terms of cost, performance and policy, which they will need to overcome rapidly to achieve a successful roll-out by 2020.

Marine energy:

The UK has a large natural resource of marine energy that could make a meaningful contribution to the UK energy mix from around 2025. Cost of energy generated will need to reach around £100/MWh by 2025 for marine energy to be competitive with other technologies. This pathway is ambitious but possible with significant innovation. If successful, innovation in Marine energy could save the energy system approximately £3 to £8 billion* and help create a UK industry that could contribute an estimated £1 to £4 billion* to GDP up to 2050.

The TINA findings will be used to underpin the design and focus of DECC's and other LCICG's members' programmes and activities in these technology areas.

Nuclear fission:

Nuclear fission can play a key part in the energy system of the UK and has the potential to help the UK replace aging power plants, reduce reliance on gas, and meet GHG emissions and low carbon energy targets. Innovation can reduce the costs of deploying, operating and decommissioning nuclear capacity, and is also important in reducing the perceived risks of investing in, for example, the UK's new build programme. We assess that innovation has the potential to deliver benefits worth £2-14bn to 2050 and £3-34bn to 2100. Innovation can also help create UK based business opportunities that could contribute an estimated £1.5-13bn to GDP by 2050.

Offshore wind:

Offshore wind power has tremendous potential to replace aging power plant, reduce reliance on imported gas, and meet GHG emissions and renewable energy targets. Innovation is critical to enabling the deployment and cutting the cost of offshore wind power, with an estimated saving to the energy system of £18-89bn to 2050. Innovation can also help create UK based business opportunities that could contribute an estimated £7-35bn to GDP to 2050. Significant private sector investment in innovation, catalysed by public sector support where there are market failures, is needed to unlock these opportunities.